Foreign investors in healthcare sector in France adapting to new system of control

The control exercised by French authorities over foreign investments has been evolving in relation to topical political and economic issues since it first began in 1966. The most recent shift occurred in May 2014, with the French government’s response to the offer of General Electric to acquire Alstom's energy business. The list of the sectors considered “sensitive” – and therefore subject to this control – was significantly extended in May 2014 to include, among others, the healthcare sector(1).

More specifically, the oversight of foreign investments is carried out via:• a system of declaration to the French Treasury and the Bank of France; and• a system of prior authorization from the French Ministry of Economy.

This system of prior authorization is a particularly sensitive issue for foreign investors, as uncertain processing times may have a significant impact on the schedule for the investment. Foreign investors must take this uncertainty into account in their M&A transactions.

Footnote1) Other sectors included for the first time by the system of authorization are the following, as per their activities with regard to equipment, products or the provision of services: water; energy; transportation; telecommunications; and sites of vital importance.